(Association of Chartered Certified Accountansy 42.7 Owing to staff illnesses, the draft final accounts for the year ended 31 March 2009 of Messrs Stone, Pebble and Brick, trading In partnership as the Bigtime Building Supply Company, have been prepared by an inexperienced, but keen, clerk. The draft summarised balance sheet as at 31 March 2009 is as follows: Tangible non-current assets: At cost less depreciation to date. 45,400 32,290. Current assets 77,690 Total assets Trade accounts payable. (6,390) Net assets 21,300 Represented by: Stone Pebble Total Brick 16.000 E Capital accounts: at 1 April 2008 26,000 18,000 60,000 Current accounts: 12,100 12,100 Share of net profit for the year ended 31 March 2009 Drawings year ended 31 March 2009 At 31 March 2009 12,100 (7,200) (8,200) 3.900 (9,600) 2,500 4,900 11,300 71,300 The partnership commenced on 1 April 2008 when each of the partners introduced, as their partner- ship capital, the net tangible non-current and current assets of their previously separate businesses, However, it has now been discovered that, contrary to what was agreed, no adjustments were made in the partnership books for the goodwill of the partners' former businesses now incorpor- ated in the partnership. The agreed valuations of goodwill at 1 April 2008 are as follows: Stone's business Pebble's business Brick's business 30,000 20,000 16,000 it is agreed that a goodwill account should not be opened in the partnership's books, It has now been discovered that effect has not been given in the accounts to the following provi- sions in the partnership agreement effective from 1 January 2009: 1 Stone's capital to be reduced to 20,000, the balance being transferred to a loan account upon which Interest at the rate of 11% per annum will be paid on 31 December each year. 2 Partners to be credited with interest on their capital account balances at the rate of 5% per annum, Brick to be credited with a partner's salary at the rate of 8,500 per annum, The balance of the net profit or loss to be shared between Stone, Pebble and Brick in the ratio 5:3:2 respectively. Notes: 1 It can be assumed that the net profit indicated in the draft accounts accrued uniformly through- out the year. 2 It has been agreed between the partners that no adjustments should be made for any partner- ship goodwill as at 1 January 2009. Required: (5) Prepare the profit and loss appropriation account for the year ended 31 March 2009. (b) Prepare a corrected statement of the partners' capital and current accounts for inclusion in 43.3 Alan, Bo tively. The balanc Nor Pr Pl Vel Firs Carre Ac G Tota Com Act Bar (Association of Chartered Certified Accountansy 42.7 Owing to staff illnesses, the draft final accounts for the year ended 31 March 2009 of Messrs Stone, Pebble and Brick, trading In partnership as the Bigtime Building Supply Company, have been prepared by an inexperienced, but keen, clerk. The draft summarised balance sheet as at 31 March 2009 is as follows: Tangible non-current assets: At cost less depreciation to date. 45,400 32,290. Current assets 77,690 Total assets Trade accounts payable. (6,390) Net assets 21,300 Represented by: Stone Pebble Total Brick 16.000 E Capital accounts: at 1 April 2008 26,000 18,000 60,000 Current accounts: 12,100 12,100 Share of net profit for the year ended 31 March 2009 Drawings year ended 31 March 2009 At 31 March 2009 12,100 (7,200) (8,200) 3.900 (9,600) 2,500 4,900 11,300 71,300 The partnership commenced on 1 April 2008 when each of the partners introduced, as their partner- ship capital, the net tangible non-current and current assets of their previously separate businesses, However, it has now been discovered that, contrary to what was agreed, no adjustments were made in the partnership books for the goodwill of the partners' former businesses now incorpor- ated in the partnership. The agreed valuations of goodwill at 1 April 2008 are as follows: Stone's business Pebble's business Brick's business 30,000 20,000 16,000 it is agreed that a goodwill account should not be opened in the partnership's books, It has now been discovered that effect has not been given in the accounts to the following provi- sions in the partnership agreement effective from 1 January 2009: 1 Stone's capital to be reduced to 20,000, the balance being transferred to a loan account upon which Interest at the rate of 11% per annum will be paid on 31 December each year. 2 Partners to be credited with interest on their capital account balances at the rate of 5% per annum, Brick to be credited with a partner's salary at the rate of 8,500 per annum, The balance of the net profit or loss to be shared between Stone, Pebble and Brick in the ratio 5:3:2 respectively. Notes: 1 It can be assumed that the net profit indicated in the draft accounts accrued uniformly through- out the year. 2 It has been agreed between the partners that no adjustments should be made for any partner- ship goodwill as at 1 January 2009. Required: (5) Prepare the profit and loss appropriation account for the year ended 31 March 2009. (b) Prepare a corrected statement of the partners' capital and current accounts for inclusion in 43.3 Alan, Bo tively. The balanc Nor Pr Pl Vel Firs Carre Ac G Tota Com Act Bar